What is CPA (Cost Per Acquisition)?

CPA shows the cost of acquiring a single purchase through advertising. CAC is broader: it includes all marketing costs.

Formula

CPA = Total Ad Spend / Number of Conversions

Example

If you spent $2,000 on ads and got 40 purchases, your CPA = $2,000 / 40 = $50. If AOV is $100 and gross margin is 50%, first-purchase profit is $50 - $50 = $0 (break-even).

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Related Terms

ROAS

ROAS (Return on Ad Spend) measures how much revenue you earn for every unit of currency spent on ads. Important: this is revenue, not profit.

CAC (Customer Acquisition Cost)

CAC shows the total cost of acquiring a new customer — including all marketing and sales costs. A healthy LTV:CAC ratio is at least 3:1.

Attribution

Attribution determines which ad channel gets "credit" for a sale. Your choice of model dramatically affects what you think about your campaign performance.

Conversion Rate

Conversion rate is the percentage of visitors who become buyers. The global average is 2.5-3%, but industry, device, and traffic source dramatically affect it.

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What is CPA (Cost Per Acquisition)? | Margyn Glossary